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Greece Comes Up With Collateral Loophole, Has Enough Cash To Roll €5 Billion Bill Maturity
Over the past several days there had been concerns that even if Greece managed to roll its maturing €5 billion in Bills with a new Bill issuance (which it did earlier today), it would be unable to actually obtain cash for this worthless paper, through a repo with the European Central Bank. The reason being that last week the ECB allowed a temporary extension in Greek ELA collateral eligibility to expire, enacted on August 2, which in turn reduced the amount of repoable T-Bills from €7 billion to just €3.5 billion, in the process reducing the amount of cash Greece can obtain in half from the Bill roll. And while there had been lots of speculation and rumors that the ECB would, as in the case of Spain, either make a "mistake" or extend the collateral pool exemption once more, this did not occur. Instead, as we have just learned, the ECB has allowed Greek banks to use "asset-backed" securities to plug the collateral gap. Needless to say, one can only conceive just what unencumbered assets still can be found on Greek bank balance sheets (here is one artist's impression) but it was largely expected that in the race to debase its currency, the ECB would once again admit that when it comes to perpetuating the Ponzi, especially at a marginal cost of a token €3.5 billion, anything goes (just don't tell Germany). And so, Greece kicks the can once again.
From Bloomberg:
Greek banks will keep receiving the same amount of emergency central bank aid despite a reduction in the amount of treasury bills they can offer in exchange, a euro- area central bank official said.
The European Central Bank’s Governing Council last week allowed a temporary increase in the amount of T-bills Greek banks can pledge for so-called Emergency Liquidity Assistance to lapse, reducing it to 3.5 billion euros ($4.4 billion) from 7 billion euros, said the official, who was briefed on the decision. However, other acceptable collateral including asset- backed securities on banks’ balance sheets have increased in value enough to make up the difference, he said.
This is where Jean-Claude Juncker solemnly says "I was not joking"
It goes on:
Spokespeople for the ECB and the Greek central bank declined to comment.
Greece today sold a total of 4 billion euros of four-week and 13-week T-bills before a redemption of 5 billion euros of similar securities on Nov. 16. After the ECB’s decision to reduce the total amount of T-bills acceptable as collateral, banks could have faced funding difficulties unless they were able to find other acceptable collateral. Overall, Greece is trying to plug a financing gap of as much as 32.6 billion euros.
German newspaper Die Welt reported yesterday that the ECB would widen the pool of acceptable collateral to help Greek banks over the financing hump. The ECB later issued a statement denying the report, saying the collateral list hasn’t changed.
Bottom line: good enough to avert a default. The problem is that soon Greece will find itself needing to fund far greater bond maturities, in addition to rolling short-term debt, at which point the hilarious excuse that Greek "assets" have gone up in value will no longer cut it. And the worst news for Greece is that Europe's AAA club, in this case mostly the Netherlands (because Germany will kick and scream but in the end never jeopardize the ultimate beneficiary of the endless Greek bailout - Deutsche Bank) just said that not one additional penny of money will be given to Greece as there is a "big risk Greece will cost us extra money."
Of course it will.
The question, however, now is - just what creative shadow banking accounting gimmicks will Greece and the ECB use to literally hand over to Greece money for which there is no eligible collateral pledge, unless of course going forward the ECB demands a strip lien on Greek real estate, thereby starting to "sequester" Greek sovereign territory in exchange for payments that ultimately go to pay off debt held primarily by the... ECB.
One can also only hope that the Greek population never understands the true insidious nature of this creeping "bailout" which for three years now does absolutely nothing for Greek society as not one new penny enters the Greek economy, but all the money is merely recycled back into banker pockets with ever more liens being imposed on whatever Greek assets are still available.
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So... there is still cash in Greece ...
Bankers borrowing from other bankers to pay off still other bankers, with "absolutely nothing for Greek society". Sounds like a sustainable plan to me. (Heavy Sarc)
It's a ponzi within a ponzi within a ponzi...I mean when do we start cutting off peoples heads?
It's all BULL SHIT! BULL SHIT! BULL SHIT!
they securitized the children of the poor.
Why not just exterminate (as in genocidal operation) the entire Greek population, call dibs on the whole country lock, stock and empty barrel, claim victory for Agenda 21, prize the gold teeth from the dead mouths of women and children, declare a triumph for population control, diminish carbon footprints without the fraud of offsets, let the beasts run free satisfying the PETA and Birkenstock crowds and whatever the hell else somebody wants promulgated, auction the whole fucking thing off to the highest bidder and then start anew with Spain.
Hero icon of the liberal elite, George Bernard Shaw would go along with that approach.
http://www.youtube.com/watch?v=7WBRjU9P5eo
who is "they"?
and dont worry; if you have a birth certificate or social security number - you too were "securitized" by "they". you just dont know about it!
Once you pop, you can't...you can't...you can't stop.
And Europe closed green.
Thank goodness
Did anyone really think the Bwankers would let Greece fall over, the victim is not yet sucked dry.......
Well said
Yeah, whatever.
Sam shit different day. Buy the hope, sell the reality. Expect the appocalypse.
Ummmmmm....the shit has all been used as collateral. Sorry fan, you are just gonna have to meet someone new.
the collateroll is their children...
Slow roasted in a crock (of sh*t) pot, then severed served up steaming hot.
<Shame on us for allowing this to happen on our watch. Plenty of shared responsibility to go around.>
Nope, Michigan bottle return run with Kramer and Newman. Just doubled Greece's collateral
They used the Fed's armored truck for the run to Michigan (not needed anymore since all the Fed's Gold is paper weight anyway) thus avoiding all those stupid fixed costs that without their removal would have gobbled up all the bottle return "profit".
#Winning
America collateralized their progeny back in 1933, look how well we turned out.
The first in a long line, and along line to come, of "defaults averted."
When one doesn't wish to deal with reality there are always available loopholes to create and exploit.
<That is.....until the last greater fool has been found and fleeced.>
Or when the general population is dead.
Or at least the segment that doesn't want to turn a blind eye and play along..........
The can kicking will continue until morale improves, or the war starts, whichever comes first.
"asset-backed securities" ... Are Nazis assets now?
Have they taken the gold?
Nailed it bru.
But, but, but...
Venizelos looks having a vagina!?
Look closer.
That, my friend, is a gunt.
But...but...but...
I don't want to look...
AAAAAAHHHHHHHHHH!!!!
I really don't need the second half of my sandwich anyway.
nothing goes with FUPA
Hedonism Bot, how's it hangin'?
The Greeks have done a fantastic job of enslaving themselves...
That's what they get for being stupid, fat, and lazy I guess...........
/s
They should just jump the E.U. ship and bring back the drachma.
It would be a bitch in the beginning, but the currency devaluation (competitiveness) and sovereign freedom would be worth it in the end.
That would require Greeks to come out of retirement at the old age of 25.
At least it would be a controlled burn.
No wiorries, loose change in the couch cushions will be used next.
The annals of history will look back on the time period between 2008 - 2013 and state, "it was the greatest can kicking the world had ever seen".
Always another can to kick. When will people learn.
off topic: but covered earlier by tyler....
can they make they make the manipulation of Silver any more obvious....
http://www.kitco.com/charts/livesilver.html
It truely is amazing how far they can kick the can.
Say hello to the newest Olympic sport... can kicking.
And perhaps not too surprisingly, the various competitors are being left in the dust behind the Kenyans (or a certain Kenyan, anyway).
Can you say "Hocus Pocus"...?
[Greece] ," it would be unable to actually obtain cash for this worthless paper, through a repo with the European Central Bank."
Forward> off to the "landfill", for some more ECB collateral.
I can't read about Greece anymore. It has become a bad comedy. The fucker has been dead for years and everyone is still trying to revive it. Doesn't anyone have any dignity anymore and just say fuck it.
Got a buddy who says out of all the different people he has done business with the only ones where he is never able to close a deal with are the Greeks. He says you waste all your time and a lot of money trying to do business with them and in the end you get zero.
Looks like Europe will come to the same conclusion one day........
The ECB probably let Greece use rehypothecated olive pits as collateral...
So the prior knowledge of this scam is why the market took off like a rocket at 10:00?
Wake up Greece.
Four years ago you could have walked away with a 40 billion headache.
The Troika have been "helping " you since then to amass a 260 billion hangover.
What do you think the next four years of "help "will achieve ?
I think it could be at least a trillion.
Poor ZH!
Don't you realize there's $40 trillion more to steal?? This sort of thing will go on until that $40 trillion is gone--say, about three years from now. What has all your getting hot under the collar, gotten you so far? You haven't affected policy in the slightest degree. The sophomoric political rantings of your posters don't help, either.
Then why did you bother to post?
Seems like you are the one that is hot under the collar.
WTF?
How asinine is it to suggest the Tylers ever thought they might?
I must say I agee. How many times on Greece have we been told "Get ready.... here it comes.... ka-boom time!" But the bomb is always a dud, and the Bankster laugh on.................
Tiring at best, financially hazardous at worst.
They just remembered the Five Billion under the mattress. Happens all the time.
http://chasvoice.blogspot.com/2012/11/the-economic-collapse-of-greece-8-...
The ECB translates into, "The Salvation Army" in Greek...
Greece has a lot of unexploited gold.
And a lot of natgas.
And respectful quantities of oil.
And olive oil.
And beautful islands.
We could have been the richest nation in the EU, and i'm not talking chauvinistically (coz im Greek), but this is the numbers talking.
A profound selloff is taking place, one of the biggest seloffs in history i might say, and no one is doing nothing.
Like no one ever did anything about poor ol' Zambia and the such.
I hope one day, people here realize what's happening . And they will.
And shit will get ugly.
And you know, our grandmothers are not the grandmothers to fuck with.
Those bitches were taking German and Italian heads off with their Mg3 :P
I keep thinking that they are going to play by the rules...I didn´t think anyone would buy Greek bonds today....I was wrong...and collateral...well the ECB can say an old shoelace is worth a billion...so that is collateral I guess...the game..the rules..and even the players keep changing....but the end of the game is still going to be very ugly...GOLD will be the umpire...Ref or whatever....that will be the final outcome when this paper game falls apart
They must be taking lessons from Calif.
Finding money after voting for tax increases.
"However, other acceptable collateral including asset- backed securities on banks’ balance sheets have increased in value enough to make up the difference, he said."
So the Old Bazooka Joe Bubble Gum wrappers are worth 100,000 Euros each?
If you're going to do it, do it BIG!
Since when did Greece print Euros?